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Condos, townhomes and HOAs

HOA documents to review before you buy

When you buy into an association, you also buy its budget, its rules and its unpaid repairs. The documents are long and dull, which is why problems hide in them. A focused read takes an evening and can save you a special assessment.

Reviewed November 2026 · Written for Buy Home Tips from the sources listed below

A homeowners association, or HOA, manages shared property and enforces rules in condos, townhome communities and many single-family neighborhoods. Owners pay dues to fund it. When you buy, you agree to its governing documents and its financial position. Ask for the documents as early as your contract allows, and make sure your contract gives you time to review them.

Worked example: reserve contribution as a share of the budgetExample association6%Fannie Mae full review minimum10%
Worked example: reserve contribution as a share of the budget. Fannie Mae's full review looks for at least 10 percent; example association from this guide

The documents and what each tells you

  • Declaration or CC&Rs: what you own, what the association owns and maintains, and use restrictions.
  • Bylaws: how the board is elected and how decisions, budgets and assessments are approved.
  • Rules and regulations: daily life: pets, parking, rentals, renovations, noise.
  • Budget and financial statements: income, expenses and the reserve contribution.
  • Reserve study: a long-range plan for replacing roofs, elevators, paving and other shared items, if one exists.
  • Meeting minutes: what the board is worried about.
  • Master insurance policy: what the association insures, and what you must insure yourself.
  • Dues statement: current dues, any amount owed on the unit and transfer fees.

Reading the budget

Look at three things:

  1. The reserve line. How much of each year's budget goes into reserves? Fannie Mae's full review for condo projects requires the budget to provide replacement reserves of at least 10 percent of the budget, calculated by dividing the annual reserve allocation by the association's annual assessment income.
  2. Delinquencies. Fannie Mae's full review also requires that no more than 15 percent of units be 60 days or more past due on dues. High delinquency means other owners carry the gap.
  3. Insurance and utilities. Rapidly rising lines can mean a dues increase is coming.

Reading the minutes

Minutes are where problems show up first. Look for:

  • Repeated discussion of roofs, siding, balconies, elevators or water intrusion
  • Contractor bids for large projects
  • Words like "special assessment", "loan" or "deferred"
  • Lawsuits, insurance claims or disputes with the developer
  • Difficulty getting or renewing insurance

Fold dues into your budget

Dues are part of your housing payment for lending purposes and for your own budget. Add them to the payment calculator, along with a cushion for future increases. If the association is underfunded, add a savings line for a possible assessment.

Your own insurance

The master policy may cover the building's structure or only the walls out. Ask your insurance agent what you need to cover inside your unit, and make sure your policy matches the association's insurance responsibilities.

If the association will not provide key documents before your review deadline, ask your agent or attorney about extending the deadline in writing rather than buying without them.

Mini calculator: the full monthly payment

Price, down payment, rate and term give principal and interest. Add your own quotes for property tax, insurance, mortgage insurance and HOA dues to see the whole bill.

Enter your figures to see the result. Nothing you type leaves this page.

A planning estimate, not a loan offer. The rate shown by default is only a placeholder; type a rate from a real Loan Estimate.

Documents to request

  • Declaration or covenants, conditions and restrictions.
  • Bylaws and rules, including rental and pet rules.
  • Current budget and the latest financial statements.
  • Reserve study, if the association has one.
  • Meeting minutes for at least the last year.
  • Insurance certificate for the master policy.
  • Any notices of special assessments or litigation.
  • A statement of dues owed on the unit and any transfer fees.

Questions buyers ask

What HOA documents should I review before buying?

The governing documents (declaration, bylaws and rules), the budget and financial statements, the reserve study, recent meeting minutes, the master insurance policy, and any notices of special assessments or lawsuits.

What is a healthy HOA reserve fund?

There is no single number for every association, but lenders have tests. For a full condo project review, Fannie Mae requires the budget to provide replacement reserves of at least 10 percent of the budget.

Why does my lender care about the HOA?

For condos, the project itself must meet loan program standards. Fannie Mae's full review, for example, looks at budget adequacy, reserves and whether more than 15 percent of units are 60 days or more past due on dues.

Can an HOA raise dues after I buy?

Yes, through its budget process under the governing documents, and it can levy special assessments for major costs. The budget, reserve study and minutes help you judge how likely that is.

Sources checked for this page

Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.

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